Walmart’s entry into Flipkart may see CEO Sachin Bansal's exit

Changes at Flipkart’s top management are nothing new, but exit of one of the founders will be significant.

BENGALURU | NEW DELHI: Flipkart’s Executive Chairman Sachin Bansal may exit the Bengaluru-based company he set up over a decade ago if negotiations with the US retail giant Walmart, which is seeking a majority stake in the company, reach a successful conclusion, said three people with knowledge of the development. Bansal, who is also the longest-serving CEO of Flipkart, had no plans to sell any of his holdings until last week and was seeking a bigger role. He may look to startup again and also mentor other entrepreneurs, the sources told ET.

“The talks around Sachin moving out of Flipkart with the Walmart deal have started in the last 3-4 days,” said one of the people mentioned above.

The decision on Sachin’s exit from Flipkart will be decided over the next one week as Flipkart and Walmart decide on the contours of the board, said a second source, adding that Sachin’s exit is “a strong possibility”.

Even as the details are still being worked out, Walmart has said that it wants the duo of Group CEO Binny Bansal and Flipkart CEO Kalyan Krishnamurthy who have been actively running the day-to-day operations as more critical members who should stay back, according to the person cited above. Sachin and Binny are part of Flipkart’s 10-member board right now while Kalyan is not on the board, according to the regulatory filings made by the company in Singapore.

Email queries sent to Flipkart and Sachin Bansal did not elicit a response at the time of filing this article. "I won’t be able to comment on anything related to this,” said Sachin Bansal over text message.

While Binny Bansal is likely to sell about a tenth of his shares in Flipkart, it is not decided how much Sachin Bansal will sell. Sachin holds about 5.5% stake in Flipkart which if the deal happens at a valuation of $20 billion will be worth over $1 billion.

Over last 2-3 years, Sachin Bansal has been focusing on building out private label brand called ‘Billion’ under Flipkart, besides looking at government affairs. He has been vocal about issues like “capital dumping” by US-rival Amazon, and is also the founding chairman of industry lobby group Indiatech.org which he set up last year. Interestingly, Amazon has also made a bid to acquire Flipkart as part of the ongoing negotiations.

Changes at the top management of Flipkart are nothing new, but an exit of one of the founders will be a significant development. The company was founded in 2007 by IIT-Delhi batchmates and former Amazon executives Sachin Bansal and Binny Bansal in a Bengaluru apartment. Till January 2016, Sachin had been the CEO of the company.

Binny, who was serving as the chief operating officer (COO) leading the logistics function, took over as CEO from Sachin, who got elevated to executive chairman in January 2016 after the company saw gross sales flatline in 2015. It’s experiments like going to a mobile application only model and becoming an open marketplace from a controlled inventory model of relying on key sellers backfired.

Flipkart also brought back Kalyan Krishnamurthy, first as head of categories in June 2016 and then elevated to Flipkart CEO in January 2017 after the company beat Amazon India during the decisive festive sales in 2016.

Binny became the group CEO at that time, looking after functions like investor relations and capital allocations across units like Myntra and Phonepe, according to a company statement. Sachin’s role had not changed as a part of this reorganisation.

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